Organization Development
Lecture 1
Diagnosing Organizations
All consultants advocate expert diagnosis and action-taking. Engineers and behavioral
scientists alike have diagnoses of organizational conflict and prescription for solving it.
Diagnosis is medical jargon for the gap between sickness and health. As biology exploded in
the late 19th century, the human body, like the workplace, was divided into manageable
components, too. Doctors became the industrial engineers of the human physique. Their claim
of expertise was based on their ability to factor in every relevant “variable” and thus heal the
sick.
It is no surprise that, applying to industrial science, diagnosis is conceived as identifying and
closing gaps between how things are and how they should be, using all the tools of science and
technology.
Lewin added a new dimension to this model. He highlighted processes unseen through 19thcentury eyes because nobody had a conceptual lens powerful enough.
The concept he developed goes by the name of the “task/process” relationship – the subtle
chicken/egg interplay between ends and means, methods and goals. A task is something
concrete, observable, and thing-oriented. It can be converted into criteria, measurements,
targets, and deadlines. A task – group dynamics people were fond of saying – refers to what is
to be done.
Process refers to how. It reflects perceptions, attitudes, reasoning. Process diagnosticians ask,
“Why aren’t we making progress?” They don’t ask when, where, and how many but why, how,
and whether. Task/process thinking can be likened to the famous visual paradox of the Old
Woman/Young Woman. Do you see a young beauty with her head turned or an old woman in
profile?
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Figure 18: Old woman/young girl
You can’t see both at once. By some mental gyration, you can learn to shift between them.
Action, on the other hand, reflects pure process. We guide it largely on automatic pilot, fueled
by little explosions of energy in the right brain – of creativity, insight, synthesis – that can’t be
quantified or specified as “targets.”
Through trained observation, you can diagnose ingenious linkages between task and process.
When work stops, for example, determine what is not being talked about – the gap between
word and deed, the all-too-human shortfall between aspiration and action. You must shift
attention the way a pilot scans instruments – from compass to altimeter to air speed indicator –
to keep task and process synchronized. That requires skills few of us learn in school.
Unfortunately, left-brain diagnostic thinking – perfected by scientists for more than 100 years –
leads people to pay attention to the compass and to consider the altimeter a frill. The diagnoser
is assumed to stand outside, impartial, “objective,” and aloof from what is observed. If you add
to this your propensity to defer to authority – parents, boss, and experts – you have a setup for
disappointment.
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For the authority/dependency relationship itself becomes a “process” issue, especially when the
person invested with abilities lacks satisfactory “answers. “Group dynamics’ great contribution
to management was its relentless gaze at the process as inseparable from the task, the diagnoser
inseparable from the diagnosis, a leader’seffectiveness inseparable from follower contributions.
What is Diagnosis?
Diagnosis is the process of understanding how the organization is currently functioning, and it
provides the information necessary to design change interventions. It generally follows from
successful entry and contracting, which set the stage for successful diagnosis. They help OD
practitioners and client members jointly determine organizational issues to focus on, how to
collect and analyze data to understand them, and how to work together to develop action steps
from the diagnosis.
Unfortunately, the term diagnosis can be misleading when applied to organizations. It suggests
a model of organization change analogous to medicine: an organization (patient) experiencing
problems seeks help from an OD practitioner (doctor); the practitioner examines the
organization, finds the causes of the problems, and prescribes a solution. Diagnosis in
organization development, however, is much more collaborative than such a medical
perspective implies and does not accept the implicit assumption that something is wrong with
the organization.
First, the values and ethical beliefs that underlie OD suggest that both organization members
and change agents should be involved in discovering the determinants of current organizational
effectiveness. Similarly, both should be involved actively in developing appropriate
interventions and implementing them. For example, a manager might seek OD help to reduce
absenteeism in his or her department. The manager and an OD consultant jointly might decide
to diagnose the cause of the problem by examining company absenteeism records and by
interviewing selected employees about possible reasons for absenteeism. Alternatively, they
might examine employee loyalty and discover the organizational elements that encourage
people to stay. Analysis of those data could uncover determinants of absenteeism or loyalty in
the department, thus helping the manager and the practitioner to develop an appropriate
intervention to address the issue. The choice about how to approach the issue of absenteeism
and the decisions about how to address it are made jointly by the OD practitioner and the
manager.
Second, the medical model of diagnosis also implies that something is wrong with the patient
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and that one needs to uncover the cause of the illness. In those cases where organizations do
have specific problems, diagnosis can be problem oriented, seeking reasons for the problems.
On the other hand, as suggested by the absenteeism example above, the practitioner and the
client may choose to frame the issue positively. Additionally, the client and OD practitioner
may be looking for ways to enhance the organization’s existing functioning. Many managers
involved with OD are not experiencing specific organizational problems. Here, diagnosis is
development oriented. It assesses the current functioning of the organization to discover areas
for future development. For example, a manager might be interested in using OD to improve a
department that already seems to be functioning well. Diagnosis might include an overall
assessment of both the task-performance capabilities of the department and the impact of the
department on its individual members. This process seeks to uncover specific areas for future
development of the department’s effectiveness.
In organization development, diagnosis is used more broadly than a medical definition would
suggest. It is a collaborative process between organization members and the OD consultant to
collect pertinent information, analyze it, and draw conclusions for action planning and
intervention. Diagnosis may be aimed at uncovering the causes of specific problems; be
focused on understanding effective processes; or be directed at assessing the overall
functioning of the organization or department to discover areas for future development.
Diagnosis provides a systematic understanding of organizations so that appropriate
interventions may be developed for solving problems and enhancing effectiveness.
Organizational diagnosis is a major practitioner skill. It usually examines two broad areas.
The first area comprises the various interacting sub-elements that make up the organization.
These includethe divisions, departments, products, and the relationships between them. The
diagnosis may also include a comparison of the top middle, and lower levels of management in
the organization.
The second area of diagnosis concerns the organizational processes. These include
communicationnetworks, team problem-solving, decision -making, leadership and authority
styles, goal-setting and planning methods, and the management of conflict and competition.
The Process:
Diagnosis is a cyclical process that involves data gathering, interpretations, and identification
of problem areas and possible action programs, as shown in Figure 19. The first step is the
preliminary identification of possible problem areas. These preliminary attempts often bring
out symptoms as well as possible problem areas.
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The second step involves gathering data based on the preliminary problem identified in the
preceding step. These data are categorized, analyzed and presented to the client in a feedback
session (steps 3 and 4). If it is determined that enough data are available (step 5), the client and
practitioner jointly diagnose and identify likely problem areas (step 6). At this point, the
client’s level of motivation to work on the problems is determined (step 7). Based upon the
diagnosis, the target systems are identified and the change strategy is designed (step 8). Finally
(step 9), the results are monitored to determine the degree of change that has been attained
versus the desired change goals.
Fig 19: The Diagnostic Process
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The Performance Gap:
One method in the diagnostic process is to determine the performance gap—-the difference
between what the organizations could do by virtue of its opportunity in its environment and
what it actually does. This leads to an approach that may be termed gap analysis. In this
method, data are collected on the actual state of the organization on a varying set of dimensions
and also on the ideal or desired state, that is, “where the organization should be. As shown in
Figure 20, the gap, or discrepancy, between the actual state and the ideal form a basis for
diagnosis and the design of interventions. The gap may be the result of ineffective performance
by internal units or may emerge because of competitive changes or new innovations. A
performance gap may also occur when the organization fails to adapt to changes in its external
environment.
Competent organizational diagnosis does not simply provide information about the system; it is
also helpful in designing and introducing action alternatives for correcting possible problems.
The diagnosis affirms the need for change and the benefits of possible changes in the client
system. Important problems are very often hidden or obscure, whereas the more conspicuous
and obvious problems are relatively unimportant. In such situations, dealing with the obvious
may not be a very effective way to manage change; this underscores the importance of the
diagnostic stage.
A performance gap may continue for some time before it is recognized, in fact, it may never be
recognized. On the other hand, the awareness of a performance gap may unfreeze the functions
within the organization that are most in need of change. When this happens, conditions are
present for altering the structure and function of the organization by introducing OD
interventions.
One OD practitioner suggests a self-assessment version of gap analysis using questionnaires to
gather information in four key areas:
1. The organization’s strengths.
2. What can be done to take advantage of the strengths?
3. The organization’s weaknesses.
4. What can be done to alleviate the weaknesses?
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In organizational diagnosis, the practitioner is looking for causality – that is, an implication
that change in one factor (such as compensation) will cause change in another factor
(productivity): a cause-effect relationship. The client is often aware of the evidence of the
problem, such as declining sales, high turnover, or loss of market share – the symptom of a
problem. In the diagnosis phase, the practitioner tries to identify what factors are causing the
problem, and therefore what needs to be changed to fix it.
Fig 20: The Performance Gap
The process of identifying the organization’s strengths and weaknesses often leads to
recognition of performance gaps and to change programs.
The Need for Diagnostic Models:
Entry and contracting processes can result in a need to understand a whole system or some
part, process, or feature of the organization. To diagnose an organization, OD practitioners and
organization members need to have an idea about what information to collect and analyze.
Choices about what to look for invariably depend on how organizations are perceived. Such
perceptions can vary from intuitive hunches to scientific explanations of how organizations
function. Conceptual frameworks that people use to understand organizations are referred to as
diagnostic models. They describe the relationships among different features of the
organization, its context, and its effectiveness. As a result, diagnostic models point out what
areas to examine and what questions to ask in assessing how an organization is functioning.
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However all models represent simplifications of reality and therefore choose certain features as
critical. Focusing attention on those features, often to the exclusion of others, can result in a
biased diagnosis. For example, a diagnostic model that relates team effectiveness to the
handling of interpersonal conflict would lead an OD parishioner to ask questions about
relationships among members, decision- making processes, and conflict resolution methods.
Although relevant, those questions ignore other group issues such as the composition of skills
and knowledge, the complexity of the tasks performed by the group, and member interdependencies. Thus, diagnostic models must be chosen carefully to address the organization’s
presenting problems as well as to ensure comprehensiveness.
Potential diagnostic models are everywhere. Any collection of concepts and relationships that
attempts to represent a system or explain its effectiveness can potentially qualify as a
diagnostic model. Major sources of diagnostic models in OD are the thousands of articles and
books that discuss, describe, and analyze how organizations function. They provide
information about how and why certain organizational systems, processes, or functions are
effective. The studies often concern a specific facet of organizational behavior,such as
employee stress, leadership, motivation, problem solving, group dynamics, job design, and
career development they also can involve the larger organization and its con text, including the
environment, strategy, structure, and culture. Diagnostic models can be derived from that
information by noting the dimensions or variables that are associated with organizational
effectiveness.
Another source of diagnostic models is OD practitioners’ experience in organizations. That
field knowledge is a wealth of practical information about how organizations operate.
Unfortunately only a small part of that vast experience has been translated into diagnostic
models that represent the professional judgments of people with years of experience in
organizational diagnosis. The models generally link diagnosis with specific organizational
processes, such as group problem solving, employee motivation, or communication between
managers and employees. The models list specific questions for diagnosing such processes.
Let’s look at a general framework for diagnosing organizations. The framework describes the
systems perspective prevalent in OD today and integrates several of the more popular
diagnostic models. The systems model provides a useful starting point for diagnosing
organizations or departments.
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Open-Systems Model:
This section introduces systems theory, a set of concepts and relationships describing the
properties and behaviors of things called systems - organizations, groups, and people, for
example. Systems are viewed as unitary wholes composed of parts or subsystems; the system
serves to integrate the parts into a functioning unit. For example, organization systems are
composed of departments such as sales, operations, and finance. The organization serves to
coordinate behaviors of its departments so that they function together in service of a goal or
strategy. The general diagnostic model based on systems theory that underlies most of OD is
called the open -systems model.
Organization as Open Systems:
Systems can vary in how open they are to their outside environments. Open systems, such as
organizations and people, exchange information and resources with their environments. They
cannot completely control their own behavior and are influenced in part by external forces.
Organizations, for example, are affected by such environmental conditions as the availability
of raw material, customer demands, and government regulations. Understanding how these
external forces affect the organization can help explain some of its internal behavior.
Open systems display a hierarchical ordering. Each higher level of system comprises lowerlevel systems: systems at the level of society comprise organizations; organizations comprise
groups (departments); and groups comprise individuals. Although systems at different levels
vary in many ways—in size and complexity, for example—they have a number of common
characteristics by virtue of being open systems, and those properties can be applied to systems
at any level. The following key properties of open systems are described below: inputs,
transformations, and outputs; boundaries; feedback; equifinality; and alignment.
Case: The Old Family Bank
The Old Family Bank is a large bank in a southeastern city. As a part of a comprehensive
internal management study, H. Day, the data-processing vice-president, examined the turnover,
absenteeism, and productivity figures of all the bank’s work groups. The results Day obtained
offered no real surprises except in the case of the check-sorting and data-processing
departments.
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The study
The study revealed that, in general, the departments displaying high turnover and absenteeism
rates had low production figures, and those with low turnover and absenteeism were highly
productive. When the check-sorting and data-processing figures were analyzed, Day
discovered that two departments were tied for the lead for the lowest turnover and absenteeism
figures. What was surprising was the check-sorting department ranked first as the most
productive unit, whereas the electronic data-processing department ranked last.
This inconsistency was further complicated by the fact that the working conditions for checksorting employees are very undesirable. They work in a large open room that is hot in the
summer and cold in the winter. They work alone and operate high-speed check-sorting
machines requesting a high degree of accuracy and concentration. There is little chance for
interaction because they take rotating coffee breaks.
The computer room is air-conditioned, with a stable temperature year around: it has perfect
lighting and is quiet and comfortable. Both groups are known to be highly cohesive, and the
workers in each department function well with one another. This observation was reinforced by
the study’s finding of the low levels of turnover and absenteeism.
The Interview Data
In an effort to understand this phenomenon, Day decided to interview the members of both
departments in order to gain some insight into the dynamics of each group’s behavior. Day
discovered that the check-sorting department displayed a great deal of loyalty to the company.
Most of the group members are unskilled or semiskilled workers; although they have no
organized union, they all felt that the company had made special efforts to keep their wages
and benefits in line with unionized operations. They knew that their work required team effort
and were committed to high performance.
A quite different situation existed in the data-processing department. Although the workers
liked their fellow employees, there was a uniform feeling among this highly skilled group that
management put more emphasis on production than on staff units. They felt that the operating
departments had gotten better pay raises, and that the wage gap did not reflect the skill
differences between employees. As a result, a large percentage of the group’s members
displayed little loyalty to the company, even though they were very close to one another.
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Case Analysis Form
Name: ____________________________________________
I. Problems
A.
Macro
1.
____________________________________________________
2.
____________________________________________________
B. Micro
1.
_____________________________________________________
2.
_____________________________________________________
II. Causes
1.
_____________________________________________________
2.
_____________________________________________________
3.
_____________________________________________________
III. Systems affected
1.
Structural ____________________________________________
2.
Psychosocial __________________________________________.
3.
Technical ______________________________________________
4.
Managerial _____________________________________________
5.
Goals and values __________________________________________
IV. Alternatives
1.
_________________________________________________________
2.
_________________________________________________________
3.
________________________________________________________
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V. Recommendations
1. _________________________________________________________
2. __________________________________________________________
3. __________________________________________________________
Case Solution: The Old Family
Bank I. Problems
A.
Macro
1. The lack of loyalty to the entire bank could affect the effectiveness (and profitability) of
the bank.
2. The bank may have a poor process for setting pay policies.
B. Micro
1.
Though the personnel in the data-processing department have a strong team,
they are not loyal to the larger organization.
2.
Data-processing personnel believe that management does not appreciate them,
their skills, andcontributions.
3. Data-processing personnel may be underpaid when compared to similar workers in
other companies.
II. Causes
1. The skilled workers in the data-processing department do not recognize all of the
factors that mayaffect pay and rewards.
2. The data-processing personnel possibly has access to more company-wide
information by virtue of the type of work their department does than do
personnel in other departments. Consequently, they get a portion of the data
without understanding how managers make decisions based upon that data.
III. Systems affected
The attitude of the data-processing personnel to the bank likely affects the entire
bank’s operations.
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IV. Alternatives
1.
H. Day gathers more data to confirm/disprove initial diagnosis.
2.
Use a diagnosis model such as force-field analysis to better understand the problem.
Working through the model may bring to light ways to change the situation in the dataprocessing department.
3.
Day checks on regional employment data to determine if data-processing personnel are
being paid competitively with similar workers in other companies. Adjust pay if
warranted by the data.
4.
Meet with the department and explain the bank’s procedures and rationale for how pay
levels are set.
V. Recommendations
All of the alternatives listed above can be undertaken by Day.
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